Amendment Rules, Circulars, Notifications and Orders under Companies Act, 2013

332 Pages·2015·0.91 MB·English

AAAAAmmmmmeeeeennnnndddddmmmmmeeeeennnnnttttt RRRRRuuuuullllleeeeesssss,,,,, CCCCCiiiiirrrrrcccccuuuuulllllaaaaarrrrrsssss
NNNNNoooootttttiiiiifffffiiiiicccccaaaaatttttiiiiiooooonnnnnsssss aaaaannnnnddddd OOOOOrrrrrdddddeeeeerrrrrsssss
uuuuunnnnndddddeeeeerrrrr CCCCCooooommmmmpppppaaaaannnnniiiiieeeeesssss AAAAAcccccttttt,,,,, 22222000001111133333
AAAAA CCCCCooooommmmmpppppeeeeennnnndddddiiiiiuuuuummmmm
[updated upto 1st August, 2015]
AAAAAUUUUUGGGGGUUUUUSSSSSTTTTT 22222000001111155555
PRICE : ` 300/- (Excluding Postage)
© TTTTTHHHHHEEEEE IIIIINNNNNSSSSSTTTTTIIIIITTTTTUUUUUTTTTTEEEEE OOOOOFFFFF CCCCCOOOOOMMMMMPPPPPAAAAANNNNNYYYYY SSSSSEEEEECCCCCRRRRREEEEETTTTTAAAAARRRRRIIIIIEEEEESSSSS OOOOOFFFFF IIIIINNNNNDDDDDIIIIIAAAAA
All rights reserved. No part of this publication may be translated or copied in any form or by any
means without the prior written permission of The Institute of Company Secretaries of India.
Although due care and diligence have been taken in the publication of this Compendium the
Institute shall not be responsible for any loss or damage, resulting from any action taken on the
basis of the contents of this Compendium. Any one wishing to act on the basis of the material
contained herein should do so after cross checking with the original source.
ISBN : 978-93-82207-20-7
Published by :
THE INSTITUTE OF COMPANY SECRETARIES OF INDIA
ICSI House, 22, Institutional Area, Lodi Road, New Delhi - 110 003
Phones : 4534 1000, 4150 4444  Fax : [phone]
Website : www.icsi.edu  E-mail : [email protected]
Printed at :
Samrat Offset Works/1000/August 2015
PREFACE TO THE THIRD EDITION
In order to facilitate ease of doing business and ease the practical difficulties
faced by the industry, the Ministry of Corporate Affairs has issued notifications,
clarifications and amendments.
The Companies (Amendment) Act, 2015 was introduced and received assent of
the President on 25th May, 2015. The amendments deal with related party
transactions, fraud reporting by auditors, restrictions on public inspection of Board
resolutions, responsibilities of audit committee, restrictions on bail, making
common seal optional, jurisdiction of special courts to try offences, etc.
Understanding the need of doing business in a smooth manner, the Ministry has
also notified much awaited exemptions for the Private companies, Government
companies, Nidhi companies and companies with charitable objects.
This edition of the compendium has been revised to include the amendments,
notifications and clarifications issued by the Ministry of Corporate Affairs till
August 1, 2015.
I commend the dedicated efforts put in by team ICSI led by CS Alka Kapoor, Joint
Secretary and comprising CS Banu Dandona, CS Lakshmi Arun, Deputy Directors,
CS Kalpesh Mehta, Assistant Director, CS Disha Kant, Assistant Education Officer,
CS Naveen Kumar, Assistant under the overall guidance of CS Sutanu Sinha,
Chief Executive & Officiating Secretary, in bringing out this publication.
In any publication, there is always scope for further improvement. I would
personally be grateful to users and readers for offering their suggestions/
comments for further refinement.
New Delhi CS Atul H. Mehta
07 August, 2015 President, ICSI
(iii)
PREFACE TO THE SECOND EDITION
Laws framed are reflection of societal developments, with varied degrees of
interpretations; there always remains scope for the regulators to ensure that the
stakeholder expectations are duly incorporated in the law.
Companies Act, 2013 was enacted on 29th August, 2013 replacing the six decade
old Companies Act, 1956. Recognizing the various operational difficulties under this
Act, the Ministry has so far issued 29 amendment rules, 54 circulars, 24 notifications,
10 orders, which signals intent of the regulators to ensure effective implementation
of this mammoth piece of legislation in accordance with stakeholders needs and
requirements.
This compendium is an effort to consolidate the amendment rules, circulars,
notifications and orders issued under Companies Act, 2013 to enhance the readability
and deeper understanding of the subject. The contents of the compendium have
been developed in a user friendly manner. It also contains in a nutshell amendment
rules, circulars, notifications and orders in a tabular form providing an overview to
the readers. Every chapter enlists the sections covered thereunder, the topics covered,
the rules framed thereunder, the notification and effective date of said rules, the
amendment rules & circulars issued by the Ministry under the Chapter.
The gist of amendment rules, circulars, notifications and orders is also given in each
chapter which is followed by complete text of the said amendment rules, circulars,
notifications and orders.
I am confident that the members and readers will find this compendium extremely
useful.
I commend the dedicated efforts put in by team ICSI led by CS Alka Kapoor, Joint
Secretary and comprising CS Banu Dandona, CS Lakshmi Arun, Deputy Directors,
CS Rakesh Kumar, CS Disha Kant, Assistant Education Officers, CS Naveen Kumar,
Assistant under the overall guidance of CS Sutanu Sinha, Chief Executive & Officiating
Secretary, in bringing out this publication.
In any publication, there is always scope for further improvement. I would personally
be grateful to users and readers for offering their suggestions/comments for further
refinement.
New Delhi CS Atul H. Mehta
29th May, 2015 President, ICSI
(v)
PREFACE TO FIRST EDITION
To master or thrive in dynamic world, we need to embrace sustainable growth and
development through continuous learning, and constant improvement in the areas
where we practise, learn and professionalize in the emerging areas, which lead to
diversification of profession at the individual and the institutional level.
The implementation phase of Companies Act, 2013 and the rules made thereunder on
operational aspects such as annual document filing, shareholders’ meeting, board
meeting, committee meeting, disclosures, transfer of securities, maintenance of records,
issue of capital, incorporation/conversion of companies, buy-back of shares etc.; issues
that involves approval of shareholders/directors; technology enabled provisions such
as e-voting, video conferencing, e-filing etc; led to initial teething difficulties, and the
Ministry of Corporate Affairs clarified the concerns of the stakeholders in its first and
second phase of notification of sections under Companies Act, 2013.
Keeping with its capacity building initiatives, the Institute has decided to bring out a
compendium of amendment rules, various notifications, circulars and orders issued by
the Ministry of Corporate Affairs, in a user friendly manner, which have been classified
Chapter-wise with text highlights and question answer along with consolidated table.
I am confident that this compendium will facilitate the members and readers in
understanding the nuances of clarifications issued by the Ministry.
I commend the dedicated efforts put in by Ms. Lakshmi Arun, Deputy Director and
Mr. Chittaranjan Pal, Assistant Education Officer in the Institute for developing
chapter-wise overview of various clarifications, comparative statements in nutshell,
under the guidance of Ms. Sonia Baijal, Director, Academics.
I would personally be grateful to the users and readers for offering their views and
suggestions for further refinement.
New Delhi CS R. Sridharan
15th August, 2014 President, ICSI
(vii)
C O N T E N T S
Introduction 1
Chapter I – Preliminary 32
Chapter II – Incorporation of company and matters incidental thereto 43
Chapter III – Prospectus and Allotment of Securities 61
Chapter IV – Share Capital and Debentures 65
Chapter V – Acceptance of Deposits by Companies 82
Chapter VI – Registration of Charges 93
Chapter VII – Management and Administration 95
Chapter VIII – Declaration and Payment of Dividend 117
Chapter IX – Accounts of Companies 122
Chapter X – Audit and Auditors 144
Chapter XI – Appointment and Qualification of Directors 156
Chapter XII – Meetings of Board and its Powers 170
Chapter XIII – Appointment and Remuneration of Managerial Personnel 190
Chapter XIV – Inspection, Inquiry and Investigation 194
Chapter XV – Compromises, Arrangements and Amalgamations 195
Chapter XVI – Prevention of Oppression and Mismanagement 196
Chapter XVII – Registered Valuers 197
Chapter XVIII – Removal of names of companies from the Register of Companies 198
Chapter XIX – Revival and Rehabilitation of Sick Companies 199
Chapter XX – Winding up 200
Chapter XXI – Companies Authorised to register under this Act 201
Chapter XXII – Companies Incorporated outside India 202
(ix)
Chapter XXIII – Government Companies 203
Chapter XXIV – Registration Offices and Fees 204
Chapter XXV – Companies to furnish information or Statistics 221
Chapter XXVI – Nidhis 222
Chapter XXVII – National Company Law Tribunal and Appellate Tribunal 223
Chapter XXVIII – Special Courts 224
Chapter XXIX – The Companies (Amendment) Act, 2015 225
Chapter XXX – Notified Exemptions 237
Others 275
SCHEDULE II 315
SCHEDULE V 319
SCHEDULE VII 321
(x)
Introduction GST - Move Towards Consumption based Tax — An Introductory Study 1
INTRODUCTION
The Companies Act, 2013 replaced six decade old Companies Act, 1956, bringing the corporate
legislation in India to be par with modern legislations elsewhere in the globe. The Companies Act,
2013 is divided into 29 chapters, 470 sections and 7 schedules. The new law incorporates several
provisions relating to investor protection, better auditing tools, fraud control, single window
clearance for mergers, e-governance, secretarial standards, board duties, board performance
evaluation, enhanced role of independent directors, institutionalization of corporate social
responsibility, etc.
The sections/rules under Companies Act 2013 are being notified in phases. Section 1 was notified
on August 29, 2013, 98 sections on September 12, 2013, Section 135 was notified on 27th February,
2014 and 183 sections on April 01, 2014. 187 sections are yet to be notified, out of these 177
sections relate to National Company Law Tribunal and other 10 Sections relate to establishment of
other statutory bodies like Investor Education Protection Fund, Special Courts, etc. All the sections
relating to operation of the company such as Incorporation and conversions, Board and General
Meetings, Board powers, Allotment and issue of share capital etc have been already notified, the
sections pertaining to the aspects such as mergers, winding up etc., that involves the role of National
Company Law Tribunal are yet to be notified.
On 25th May, 2015,the President of India gave his assent to the Companies (Amendment) Act,
2015 and the Ministry of Corporate Affairs vide Notification No. S.O. 1440(E) dated 29th May, 2015
notified sections 1 to 12 and 15 to 23 of Companies (Amendment) Act, 2015.
As there have been implementation difficulties with respect to the notified sections of the
Companies Act 2013, pertaining to the functions and operations of the company, the Ministry has
been issuing circulars notifications, orders and amendment rules etc.
Broad topics covered in these circulars, notifications, orders and amendment rules include :
1. Corporate Social Responsibility
2. Conversion of companies
3. Definition of associate company/subsidiary company
4. Entries in the register of loans and investments
5. E-voting
6. Independent Director
1
2 Amendment Rules, Circulars, Notifications and Orders under Companies Act, 2013
7. Name availability etc.
8. Related party transactions
9. Relevant Financial year for filing of annual return/annual accounts under the Companies Act
2013
10. Resident Director
11. Share transfer forms executed before the notification
12. The Companies (Amendment) Act, 2015
13. Exemptions to Government Companies
14. Exemptions to Nidhi Companies
15. Exemptions to Private Companies
16. Exemptions to Section 8 (Non-Profit)
17. Sending of Financial Statement at shorter notice
18. Fee relaxation for forms MGT-7 and AOC - 4.
A brief of these circulars/notifications/amendments is given in this chapter.
Introduction 3
Companies Act 2013
The Genesis
Passed in Loksabha on December 18, 2012
Passed in Rajya Sabha on August 08, 2013
President's assent on August 29, 2013
Total no of chapters/sections/schedules-29/470/7
No of sections/schedules notified-282/7
The Companies (Amendment) Act, 2015
Statement of objects and reasons
E-governance
Corporate Social Responsibility
Enhanced disclosures
Investor protection and protection of minority
Secretarial Audit/Secretarial Standards
New Concepts
One person Company/Small Company/Dormant Company
Indepenent Director/Women Director/Resident Director
Special Courts/class actions
Registered valuer
Vigil Mechanism
Cross Border Mergers
Clarifications/amendments issued on aspects inluding
E-voting, CSR,E-forms
Audit/Nomination committee
Definition of Associate Company/Related party
Share Transfer forms
Conversion of public limited to Private Limited
Independent Director/Women Director